One feature of the economy I’ve never understood is the huge transaction costs associated with real estate.
Real estate agents are, for the most part, able to hold commission. Six percent on a sale, split between broker for buyer and seller, is standard. During tough times when nothing is moving a seller may offer an extra percentage point to the buyer’s broker as an extra inducement to show the property. (No matter what your broker tells you they aren’t working for you, they are working for a sale.)
Nonetheless at the edges of real estate there are rebate offers. There are brokers who will charge you only 1% if you’re the seller, but of course you’re advised to offer the full commission to the buyer’s agent for fear that they won’t encourage their clients to look otherwise.
Discount brokerages aside, there are referral fee offers. Brokers will give credit to whomever refers a client to them. And like shopping portals, companies can make money steering clients by rebating a part of the commission to clients.
That exists in the real estate space… for real estate commissions, for mortgages, and even for moving companies.
When I bought a condo in 2006 I used a mileage-referral service to sign me up for a real estate agent. I didn’t have an agent I really wanted to work with, I’m mostly a do-it-yourselfer on those things. I didn’t actually like the person they sent me to, so I had the brokerage assign me to someone else that I connected better with. And I picked up enough points for a first class ticket to Australia for the purchase I was making anyway.
Of course you need to shop mortgages separately, the most important thing is rate and fees, the deals they give you through these sites may or may not be the best you’ll do. The miles, though, are just marketing expense — advertising — and I like to at a minimum investigate whether having the ad spending rebated to me will work out better than being persuaded by television.
Here are similar mileage offers — from the same company — to earn points with AAdvantage for the same activities.
Big financial decisions mean big miles. The days, of course, of churning refinances and home equity loans for hundreds of thousands of miles at the cost of a few hundred bucks is done, but if you’re actually doing real estate transactions then look for the best price — an agent who rebates part of their commission in cash or points, or who will charge you lower fees for instance.
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